More than one in three takeovers in Belgium is realised by private equity or venture capital funds.
The findings are based on 446 Belgian mergers and acquistions of unlisted companies in the period 2016-2020. The total deal value of all transactions is 25 billion euro.
In the fifth edition of this survey, the following interesting findings emerge:
Private equity and venture capital funds are involved in 36% of the takeovers (for deals > EUR 100 millon euro this even rises to 59%).
A takeover process usually lasts between 7 and 9 months.
The non-compete clause usually has a duration of 3 years.
In 29% of the deals an auction system was used (for the larger deals it is even 76%). An upward trend compared to the previous edition of the survey.
Another growing trend are the 'locked box' deals (57% of the transactions), whereby the acquisition price is set on the basis of the 'picture' of the company on one specific date and is not adjusted afterwards. The success of the locked box is linked to the rise of auctions, as the technique makes it easier to compare different bids.
For the first time, the survey shows that most M&A deals in Belgium (57%) involve deferred payments. In most cases, this is an "earn-out" arrangement, whereby the selling price can still vary depending on the achievement of certain objectives by the sold company.
Conclude specialised insurance for declarations and warranties (Warranty and indemnity (W&I) insurance) is a final upward trend, accounting for a quarter of the deals.
Source: survey law firm Contrast & De Tijd